Get check boxes and initials out of your release!

If the defendants release did not have a catch all phrase at the bottom of the document the release would be invalid because an initial had not been signed by the plaintiff.

Scott-Moncrieff v. Lost Trails, LLC, 2018 U.S. Dist. LEXIS 146936 *; 2018 WL 4110742

State: Pennsylvania: United States District Court for the Middle District of Pennsylvania

Plaintiff: Patrice Scott-Moncrieff

Defendant: The Lost Trails, LLC, et al

Plaintiff Claims: Plaintiff argues that Plaintiff did not sign a waiver on the date of the accident, and therefore did not waive any liability or assume any risk; that she was rushed and unable to read the original waiver in its entirety; that the waiver is unenforceable as not properly conspicuous; and finally, that because the earlier waiver signed by Plaintiff was “for all time thereafter” it should not be enforced.

Defendant Defenses: Release

Holding: For the defendant

Year: 2018

Summary

The plaintiff did not initial one of the initial boxes on the release she signed. This gave the plaintiff enough of an argument to make an appellate argument. But for a final paragraph that covered the uninitialed box language this release would have failed.

Facts

On October 20, 2013, Plaintiff visited Defendant’s ATV facility for the first time and, prior to using the facility, executed a waiver of liability. Plaintiff did not read the waiver in its entirety prior to signing it, and claims she was rushed during the process. On June 22, 2014, Plaintiff returned to the facility, at which time she alleged suffered injuries when she was thrown from the ATV she was riding.

Plaintiff initialed all of the above provisions. She did not initial paragraph 10 on the next page, however, which states as follows:

l0. Having had ample time and opportunity to raise any concerns or questions that I may have, and having read and understood the information, I certify my acceptance of the aforementioned provisions by signing below.

I am in good health and physical condition. I am voluntarily participating with knowledge that dangers are involved and agree to assume all risks. I also understand that if I am injured or become ill, I agree that Lost Trails LLC, or any of its employees, volunteers or guests will not be held liable should they render medical assistance to me or my minor child.

Despite not specifically initialing paragraph 10, Plaintiff did sign the agreement, indicating her acceptance and understanding of the exculpatory clauses.

Analysis: making sense of the law based on these facts.

The court first reviewed the validity of releases under Pennsylvania law. Pennsylvania has a three-part test to determine if releases are valid.

An exculpatory clause is valid if the following conditions are met: 1) the clause does not contravene public policy; 2) the contract is between parties relating entirely to their own private affairs; and 3) the contract is not one of adhesion. A valid exculpatory clause is only enforceable if “the language of the parties is clear that a person is being relieved of liability for his own acts of negligence.”. A waiver of liability violates public policy only if it involves “a matter of interest to the public or the state. Such matters of interest to the public or the state include the employer-employee relationship, public service, public utilities, common carriers, and hospitals.” The exculpatory clause at issue in this case does not contravene public policy because it does not affect a matter of interest to the public or the state.

The three requirements all evolve around the public policy argument. It is against public policy to have someone sign a release for a necessity, where the bargaining power is not equal or if the contract is so nasty it should not be signed by anyone. A release, a contract, to ride an ATV is valid because it is not a necessity, it is between parties of equal bargaining power and it is voluntary.

The contract meets the third prong of the Topp Copy validity standard because it is not a contract of adhesion. Agreements to participate in “voluntary sporting or recreational activities” are not contracts of adhesion because “[t]he signer is a free agent who can simply walk away without signing the release and participating in the activity, and thus the contract signed under such circumstances is not unconscionable.” “The signer is under no compulsion, economic or otherwise, to participate, much less to sign the exculpatory agreement, because it does not relate to essential services, but merely governs a voluntary recreational activity.”

If the release passes the first three tests, it still must be scrutinized by the court to determine if it clearly relieves the defendant of liability. If the language of the agreement sets forth the requirements necessary for the plaintiff to understand she is liable for her injuries.

Even if an exculpatory clause is facially valid, it is enforceable only if it clearly relieves a party of liability for its own negligence. The following standards guide a court’s determination of the enforceability of an exculpatory clause:

1) the contract language must be construed strictly, since exculpatory language is not favored by the law; 2) the contract must state the intention of the parties with the greatest particularity, beyond doubt by express stipulation, and no inference from words of general import can establish the intent of the parties; 3) the language of the contract must be construed, in cases of ambiguity, against the party seeking immunity from liability; and 4) the burden of establishing the immunity is upon the party invoking protection under the clause.

If the release, or any contract under Pennsylvania law meets those tests it is finally reviewed to determine if both parties clearly understood the intent of the agreement. In the case of a release, both parties must understand that the possible plaintiff is giving up his or her right to sue the possible defendant.

Further, the language of the waiver is clear. In interpreting the language of a contract, courts attempt to ascertain the intent of the parties and give it effect. When a writing is clear and unequivocal, its meaning must be determined by its contents alone. “[I]t is not the function of this Court to re-write it, or to give it a construction in conflict with … the accepted and plain meaning of the language used.” Here, the language of the waiver form is unequivocal in stating the intent that it is binding for all time thereafter.

In this case, the court found the release passed all of the tests.

As such, the Court finds that the October 2013 waiver executed by Plaintiff was in effect during her June 2014 visit to Defendant’s property.1

Once the release was found to be valid the next issue was whether or not the plaintiff had signed the release. The plaintiff argued because she had not initialed an initial box, had not read the release in its entirety

One who is about to sign a contract has a duty to read that contract first.” In the absence of fraud, the failure to read a contract before signing it is “an unavailing excuse or defense and cannot justify an avoidance, modification or nullification of the contract.” (Under Pennsylvania law, the failure to read a contract does not nullify the contract’s validity.)

The court did look at situations were the release was enforceable even if the plaintiff did not read the release or could not read the release.

…(written release found to be enforceable even when the agreement was in English but the plaintiff only read and spoke Spanish, noting that the “[p]laintiff cannot argue that the release language was inconspicuous or somehow hidden from his attention…. Nor did Defendant have an obligation to verify that [p]laintiff had read and fully understood the terms of the document before he signed his name to it.”). In this case, there is no allegation or evidence of fraud, and as such, Plaintiff’s argument is without merit.

The plaintiff argued the release was unenforceable because it was inconspicuous. However, the argument seemed to be based on case law that found waivers to be void then the real facts of this case.

The waiver form in this case was two pages in length, and initialed and signed by Plaintiff. It was not, like the waiver in Beck-Hummel, printed in small font on the back of a tubing ticket. This was a waiver that was reviewed, initialed and signed by Plaintiff. As such, the requirements of conspicuity set forth in Beck-Hummel would not necessarily apply.

The saving language of the release that covered the un-initialed section 10 was. Even though paragraph 10 was not initialed, the heading clearly stated what the document was and the intentions of the parties. The language that covered the un-initialed paragraph 10 was:

I HAVE READ THIS RELEASE OF LIABILITY, WAIVER OF LEGAL RIGHTS AND ASSUMPTIONS OF RISK AND FULLY UNDERSTAND ITS CONTENTS. I SIGN IT WILLINGLY, VOLUNTARILY AND HAVING HAD AMPLE OPPORTUNITY TO RAISE ANY QUESTIONS OR CONCERNS THAT I MAY HAVE, I ACKNOWLEDGE THAT I AM PARTICIPATING VOLUNTARILY WITH KNOWLEDGE THAT DANGERS ARE INVOLVED AND I AGREE TO ASSUME ALL THE RISKS.

The court found that the entire agreement was covered by this saving language above. So, the failure to initial one paragraph was not enough to void the release.

The court summarized its reasoning for finding the release valid and upholding the dismissal of the plaintiff’s claims because of the release.

These clauses are conspicuously set apart, appearing in capital letters, and in the case of the final paragraph, fully set apart, in all bold and all capitals. Further, the agreement itself is titled “Waiver Form” which notifies the reader of the purpose of the form. Plaintiff initialed the paragraphs setting forth the exculpatory clauses,2 and signed the agreement directly underneath the final, most prominent waiver clause. As such, the Court finds that the exculpatory clauses are valid and enforceable.

So Now What?

But for language at the bottom of the release which the court found to cover for the language that was not initialed the release would have failed. It is important to note; the court analysis stated the language that was not initialed was not part of the release.

If you have initial boxes, initials, etc., and one box is not initialed, in Pennsylvania that paragraph that is not initialed or initialed is invalid. Dependent upon the language, your release maybe void, if you don’t have the boxes checked or initialed.

Why use them anyway. Here the court explains why they are unnecessary, the language at the bottom of your release should tie everything together. Once you sign you acknowledge that you have read and understood the entire document. The checkboxes or initials can only hurt you in a release, not help you.

What do you think? Leave a comment.

Copyright 2018 Recreation Law (720) 334 8529

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Scott-Moncrieff v. Lost Trails, LLC, 2018 U.S. Dist. LEXIS 146936 *; 2018 WL 4110742

Scott-Moncrieff v. Lost Trails, LLC, 2018 U.S. Dist. LEXIS 146936 *; 2018 WL 4110742

Scott-Moncrieff v. Lost Trails, LLC

United States District Court for the Middle District of Pennsylvania

August 29, 2018, Decided; August 29, 2018, Filed

CIVIL ACTION NO. 3:16-CV-1105

Reporter

2018 U.S. Dist. LEXIS 146936 *; 2018 WL 4110742

PATRICE SCOTT-MONCRIEFF, Plaintiff v. THE LOST TRAILS, LLC, et al, Defendants

Subsequent History: Appeal filed, 09/13/2018

Core Terms

exculpatory clause, parties, enforceable, material fact, summary judgment, conspicuity, activities, minor child, initialed, non-moving, Trails, signing, Sports, waiver form, font, summary judgment motion, recreational activity, assumption of risk, intent of a party, genuine issue, legal right, requirements, membership, adhesion, rushed, ticket, ride, gym

Counsel: [*1] For Patrice Scott-Moncrieff, Plaintiff: James W. Sutton, III, LEAD ATTORNEY, LAW OFFICES OF VIASAC & SHMARUK, FEASTERVILLE, PA.

For The Lost Trails, LLC, d/b/a Lost Trails ATV Adventures, Defendant, Cross Claimant, Cross Defendant: John T. McGrath, Jr., Marshall, Dennehey, Warner, Coleman & Goggin, Scranton, PA; Michael J. Connolly, Moosic, PA.

Judges: KAROLINE MEHALCHICK, United States Magistrate Judge.

Opinion by: KAROLINE MEHALCHICK

Opinion

MEMORANDUM OPINION

Before the Court is a motion for summary judgment filed by Defendant, The Lost Trails, LLC (“Lost Trails”) in this matter. The motion (Doc. 50) was filed on November 14, 2017, together with a brief in support (Doc. 52), and Statement of Facts (Doc. 53). Plaintiff, Patrice Scott-Moncrieff, filed a brief in opposition (Doc. 54) on November 28, 2017, a reply brief (Doc. 55) was filed on December 6, 2017, and a sur reply brief (Doc. 62) was filed on January 17, 2018. This motion is ripe for disposition. For the following reasons, the Court will grant the motion for summary judgment.

I. Factual Background and Procedural History

The factual background is taken from Defendant’s Statements of Undisputed Material Facts (Doc. 53). Where the parties dispute certain facts, [*2] those disputes are noted. In addition, the facts have been taken in the light most favorable to the plaintiff as the non-moving party, with all reasonable inferences drawn in her favor. This is in accordance with the Local Rules of this Court, which state, in pertinent part, as follows:

LR 56.1 Motions for Summary Judgment.

A motion for summary judgment filed pursuant to Fed.R.Civ.P.56, shall be accompanied by a separate, short and concise statement of the material facts, in numbered paragraphs, as to which the moving party contends there is no genuine issue to be tried.

The papers opposing a motion for summary judgment shall include a separate, short and concise statement of the material facts, responding to the numbered paragraphs set forth in the statement required in the foregoing paragraph, as to which it is contended that there exists a genuine issue to be tried.

Statements of material facts in support of, or in opposition to, a motion shall include references to the parts of the record that support the statements.

All material facts set forth in the statement required to be served by the moving party will be deemed to be admitted unless controverted by the statement required to be served by the opposing [*3] party.

Local Rule 56.1 (emphasis added).

To comply with Local Rule 56.1, Plaintiff should (1) clearly and unequivocally admit or deny whether each fact contained in Defendant’s statement of facts is undisputed and/or material, (2) set forth the basis for any denial if any fact is not admitted in its entirety, and (3) provide a citation to the record that supports any such denial. Occhipinti v. Bauer, No. 3:13-CV-1875, 2016 U.S. Dist. LEXIS 136082, 2016 WL 5844327, at *3 (M.D. Pa. Sept. 30, 2016); Park v. Veasie, 2011 U.S. Dist. LEXIS 50682, 2011 WL 1831708, *4 (M.D. Pa. 2011). As such, where Plaintiff disputes a fact set forth by Defendant, but fails to provide a citation to the record supporting their denial, that fact will be deemed to be admitted. “Unsupported assertions, conclusory allegations, or mere suspicions” are insufficient to overcome a motion for summary judgment. Schaar v. Lehigh Valley Health Servs., Inc., 732 F.Supp.2d 490, 493 (E.D.Pa. 2010). In this matter, Plaintiff, though including a statement of fact in her brief in opposition to Defendant’s motion for summary judgment (Doc. 54), does not comply with the local rules and submit a separate statement of material facts in opposition to Defendant’s statement of material facts. Notably, despite being given the opportunity to file a sur-reply brief in this matter, after Defendant raises the issue of Plaintiff’s failure to file a statement of facts in its Reply Brief (Doc. 55), Plaintiff still [*4] did not file a separate statement of fact. As such, the facts set forth in Defendant’s statement of material facts will be deemed admitted.

On October 20, 2013, Plaintiff visited Defendant’s ATV facility for the first time and, prior to using the facility, executed a waiver of liability. (Doc. 50-2, at 4-5; DOC. 53, AT ¶¶ 5, 9). Plaintiff did not read the waiver in its entirety prior to signing it, and claims she was rushed during the process. (Doc. 53, at ¶ 7; Doc. 50-2, at 71). On June 22, 2014, Plaintiff returned to the facility, at which time she alleged suffered injuries when she was thrown from the ATV she was riding. (Doc. 1).

The release from liability signed by Plaintiff on October 20, 2013 reads, in pertinent part, as follows:

In consideration for the opportunity for event participation and utilization of general admission, all facilities, equipment and premises of Lost Trails, LLC (LT), North American Warhorse Inc, (NAW) Theta Land Corp. (TLC), 1000 Dunham Drive LLC (DD), and their respective affiliates, members, agents, employees, heirs and assigns and other associates in furtherance of the sport of Off-Road Riding, racing and any other activities, scheduled or unscheduled, [*5] (hereinafter collectively called “Off-Roading.”) This Waiver shall commence on the date first signed and shall remain binding for all time thereafter.

By signing this document, I hereby understand and agree for me and/or my minor child to this Release of Liability, Wavier of Legal rights and Assumption of Risk and to the terms hereof as follows:


2. I hereby RELEASE AND DISCHARGE LT, NAW, TLC, DD and all related parties, event volunteers, company officers, directors, elected officials, agents, employees, and owners of equipment, the land used for Off-Roading activities and any owners of adjourning lands to the premises (hereinafter collectively referred to as “Released parties”) from any and all liability claims, demands or causes of action that I, my minor child or my representatives and my heirs may hereafter have for injuries, loss of life, and all other forms of damages arising out of my voluntary participation in Off-Roading activities.

3. I understand and acknowledge that Off-Road riding and racing activities have inherent dangers that no amount of care, caution, instruction or expertise can eliminate and I EXPRESSLY AND VOLUNTARILY ASSUME ALL RISK OF DEATH OR PERSONAL INJURY [*6] OR OTHER FORMS OF DAMAGES SUSTAINED WHILE PARTICIPATING IN OFF-ROADING ACTIVITIES WHETHER OR NOT CAUSED BY THE NEGLIGENCE OF THE RELEASE PARTIES.

4. I further agree that I WILL NOT SUE OR OTHERWISE MAKE A CLAIM on behalf of me and/or on behalf of my minor child, against the Released Parties for damages or other losses sustained as a result of my participation in Off-Roading activities.

5. I also agree to INDEMNIFY AND HOLD THE RELEASED PARTIES HARMLESS from all claims, judgments and costs, including attorneys’ fees, incurred in the connection with any action brought against them, jointly or severally, as a result of my or my minor child’s participation in “Off-Roading” activities.

6. I take full responsibility for, and hold harmless Released Parties for any injury, property damage, or death that I or my minor child may suffer or inflict upon others .or their property as a result of my engaging in Off-Roading activities.

7. I further represent that I am at least 18 years of age, or that as the parent or (adult) legal guardian, I waive and release any and all legal rights that may accrue to me, to my minor child or to the minor child for whom I am (adult) legal guardian, as the result of [*7] any injury or damage that my minor child, the minor child for whom I am (adult) legal guardian, or I may suffer while engaging in Off-Roading activities.

8. I hereby expressly recognize that this Release of Liability, Waiver of Legal Rights and Assumption of Risks is a contract pursuant to which I have released any and all claims against the Released Parties resulting from participation in Off-Roading activities including any claims related to the negligence of the Released Parties by any of the undersigned.

9. I further expressly agree that the foregoing Release of Liability, Waiver of Legal Rights and Assumption of Risks is intended to be as broad and inclusive as is permitted by law of the province or state in which services, materials and/or equipment are provided and the course of business is conducted, and that if any portion thereof is held invalid, it is agreed that the balance shall, notwithstanding, continue in full legal force and effect. I agree that, should any claim or action arise from my participation as described herein, including any issue as to the applicability of this Release or any provision contained within it, proper Jurisdiction and Venue will lie only in Monroe [*8] County, Pennsylvania and I waive Jurisdiction and Venue anywhere else.

(Doc. 54-1, at 20-21).

Plaintiff initialed all of the above provisions. She did not initial paragraph 10 on the next page, however, which states as follows:

l0. Having had ample time and opportunity to raise any concerns or questions that I may have, and having read and understood the information, I certify my acceptance of the aforementioned provisions by signing below.

I am in good health and physical condition. I am voluntarily participating with knowledge that dangers are involved and agree to assume all risks. I also understand that if I am injured or become ill, I agree that Lost Trails LLC, or any of its employees, volunteers or guests will not be held liable should they render medical assistance to me or my minor child.

(Doc. 54-1, at 21).

Despite not specifically initialing paragraph 10, Plaintiff did sign the agreement, indicating her acceptance and understanding of the exculpatory clauses. (Doc. 54-1).

II. Legal Standard

Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment should be granted only if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” only [*9] if it might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A dispute of material fact is “genuine” if the evidence “is such that a reasonable jury could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248. In deciding a summary judgment motion, all inferences “should be drawn in the light most favorable to the non-moving party, and where the non-moving party’s evidence contradicts the movant’s, then the non-movant’s must be taken as true.” Pastore v. Bell Tel. Co. of Pa., 24 F.3d 508, 512 (3d Cir. 1994).

A federal court should grant summary judgment “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000). In deciding a motion for summary judgment, the court’s function is not to make credibility determinations, weigh evidence, or draw inferences from the facts. Anderson, 477 U.S. at 249. Rather, the court must simply “determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249.

The party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion,” and demonstrating the absence of a genuine dispute of any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). If the movant makes [*10] such a showing, the non-movant must go beyond the pleadings with affidavits or declarations, answers to interrogatories or the like in order to demonstrate specific material facts which give rise to a genuine issue. Fed. R. Civ. P. 56(c); Celotex, 477 U.S. at 324. The non-movant must produce evidence to show the existence of every element essential to its case, which it bears the burden of proving at trial, because “a complete failure of proof concerning an essential element of the nonmoving party’s case necessarily renders all other facts immaterial.” Celotex, 477 U.S. at 323. Furthermore, mere conclusory allegations and self-serving testimony, whether made in the complaint or a sworn statement, cannot be used to obtain or avoid summary judgment when uncorroborated and contradicted by other evidence of record. See Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888, 110 S. Ct. 3177, 111 L. Ed. 2d 695 (1990); see also Thomas v. Delaware State Univ., 626 F. App’x 384, 389 n.6 (3d Cir. 2015) (not precedential) (“[U]nsupported deposition testimony, which is contradicted by the record, is insufficient to defeat summary judgment.”); NLRB v. FES, 301 F.3d 83, 95 (3d Cir. 2002) (“[The plaintiff’s] testimony . . . amounts to an unsupported, conclusory assertion, which we have held is inadequate to satisfy the movant’s burden of proof on summary judgment.”).

As this jurisdiction of this Court is sounded in the diversity of the parties pursuant to 28 U.S.C. § 1332(a), Pennsylvania substantive [*11] law will apply. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

III. Discussion

Defendant submits that it is entitled to judgment in its favor because Plaintiff executed a valid waiver of all liability prior to ever engaging in any recreational activities on Defendant’s property; because such releases and waivers are recognized under Pennsylvania law; and because within the waiver, Plaintiff specifically acknowledged that she was assuming all of the risks associated with these activities. (Doc. 52, at 2). In response, Plaintiff argues that Plaintiff did not sign a waiver on the date of the accident, and therefore did not waive any liability or assume any risk; that she was rushed and unable to read the original waiver in its entirety; that the waiver is unenforceable as not properly conspicuous; and finally, that because the earlier waiver signed by Plaintiff was “for all time thereafter” it should not be enforced. (Doc. 54).

A. The Exculpatory Clause is Valid

An exculpatory clause is valid if the following conditions are met: 1) the clause does not contravene public policy; 2) the contract is between parties relating entirely to their own private affairs; and 3) the contract is not one of adhesion. Evans v. Fitness & Sports Clubs, LLC, No. CV 15-4095, 2016 U.S. Dist. LEXIS 133490, 2016 WL 5404464, at *3 (E.D. Pa. Sept. 28, 2016); [*12] Topp Copy Prods., Inc. v. Singletary, 533 Pa. 468, 626 A.2d 98, 99 (Pa. 1993). A valid exculpatory clause is only enforceable if “the language of the parties is clear that a person is being relieved of liability for his own acts of negligence.” Id. A waiver of liability violates public policy only if it involves “a matter of interest to the public or the state. Such matters of interest to the public or the state include the employer-employee relationship, public service, public utilities, common carriers, and hospitals.” Seaton v. E. Windsor Speedway, Inc., 400 Pa. Super. 134, 582 A.2d 1380, 1382 (Pa. Super. Ct. 1990); see also Kotovsky v. Ski Liberty Operating Corp., 412 Pa. Super. 442, 603 A.2d 663, 665 (Pa. Super. Ct. 1992). The exculpatory clause at issue in this case does not contravene public policy because it does not affect a matter of interest to the public or the state. See Kotovsky, 603 A.2d at 665-66 (holding that releases did not violate public policy because “[t]hey were [in] contracts between private parties and pertained only to the parties’ private rights. They did not in any way affect the rights of the public.”). Thus, the exculpatory clause meets the first two prongs of the Topp Copy standard for validity.

The contract meets the third prong of the Topp Copy validity standard because it is not a contract of adhesion. Agreements to participate in “voluntary sporting or recreational activities” are not contracts of adhesion because “[t]he signer is a free agent [*13] who can simply walk away without signing the release and participating in the activity, and thus the contract signed under such circumstances is not unconscionable.” Chepkevich v. Hidden Valley Resort, L.P., 607 Pa. 1, 2 A.3d 1174, 1190-91 (Pa. 2010). “The signer is under no compulsion, economic or otherwise, to participate, much less to sign the exculpatory agreement, because it does not relate to essential services, but merely governs a voluntary recreational activity.” Id. The Agreement at issue here is not a contract of adhesion because it is a contract to participate in voluntary recreational activities. The Agreement does not relate to an essential service, and Plaintiff was free to engage in the activity, or not, as she wished. She was under no compulsion to do so. See Chepkevich, supra; see also Hinkal v. Pardoe, 2016 PA Super 11, 133 A.3d 738, 741-2 (Pa. Super. Ct. 2016) (en banc), appeal denied, 636 Pa. 650, 141 A.3d 481 (Pa. 2016) (citing the “thorough and well-reasoned opinion” of the trial court, which held that the plaintiff’s gym membership agreement was not a contract of adhesion because exercising at a gym is a voluntary recreational activity and the plaintiff was under no compulsion to join the gym). The Agreement meets all three prongs of the Topp Copy standard for validity, and thus the exculpatory clause is facially valid.

B. The Exculpatory Clause is Enforceable

Even if an exculpatory clause is [*14] facially valid, it is enforceable only if it clearly relieves a party of liability for its own negligence. Evans v. Fitness & Sports Clubs, LLC, No. CV 15-4095, 2016 U.S. Dist. LEXIS 133490, 2016 WL 5404464, at *5 (E.D. Pa. Sept. 28, 2016). The following standards guide a court’s determination of the enforceability of an exculpatory clause:

1) the contract language must be construed strictly, since exculpatory language is not favored by the law; 2) the contract must state the intention of the parties with the greatest particularity, beyond doubt by express stipulation, and no inference from words of general import can establish the intent of the parties; 3) the language of the contract must be construed, in cases of ambiguity, against the party seeking immunity from liability; and 4) the burden of establishing the immunity is upon the party invoking protection under the clause.

Topp Copy, 626 A.2d at 99.

The Court now turns to Plaintiff’s arguments against the enforceability of the exculpatory clause.

1. Plaintiff’s first waiver is enforceable, including the clause “for all time thereafter.”

Plaintiff submits that the waiver she executed in October 2013 did not apply to her visit to Defendant on June 22, 2014, because “it is uncontroverted that the Defendant has a policy that dictates all [*15] riders must sign a waiver every time they ride an ATV at their park” (Doc. 54, at 4), and Plaintiff did not sign a waiver when she visited the park in June 2014. Defendant counters that Plaintiff is misconstruing the record in making this assertion. (Doc. 55, at 2). Specifically, Defendant submits that the testimony cited by Plaintiff is that of a former maintenance man who has nothing to do with policy or procedure at Defendant’s property, and further, that he neither testifying as a representative of, nor acting on behalf of, Lost Trails, LLC. (Doc. 55-1, at 4). The testimony offered by the Plaintiff on this issue is that of Matthew Anneman, who testified as follows:

Q: Everybody that goes there is supposed sign the waiver before they go out on the trails, is that fair to say?

A: Yes.

Q: Do you know if Miss Moncrieff signed a waiver before she went on the trail that day?

A: Yes. It is imperative that everybody who comes to ride on that mountain is to fill out a waiver.


Q: So every single time somebody comes to the facility, before they go out there, they go in and sign a waiver.

A: Yes.

Q: And you’re not involved in that part of it, the sign in, and the waiver.

A: No, no. Leslie or one [*16] of her employees would work the front desk.

(Doc. 54-1, at 12; Anneman Dep. at 36).

The Court finds this testimony to have little to no bearing on the validity and applicability of the October 2013 waiver. Even construing the evidence in the record in Plaintiff’s favor, Mr. Anneman’s testimony does not change the fact Plaintiff did sign a waiver in October 2013, one which indicated that it “shall remain binding for all time thereafter.” (Doc. 54-1, at 20) (emphasis added). Nothing in the record before the Court indicates that Mr. Anneman was responsible for either policy at Defendant’s facility, or in any way even involved with the waiver process. Further, the language of the waiver is clear. In interpreting the language of a contract, courts attempt to ascertain the intent of the parties and give it effect. Sycamore Rest. Grp., LLC v. Stampfi Hartke Assocs., LLC, 2017 Pa. Super. 221, 174 A.3d 651, 656 (2017); LJL Transp., Inc. v. Pilot Air Freight Corp., 599 Pa. 546, 962 A.2d 639, 648 (2009). When a writing is clear and unequivocal, its meaning must be determined by its contents alone. Synthes USA Sales, LLC v. Harrison, 2013 Pa. Super. 324, 83 A.3d 242, 250-51 (2013); Murphy v. Duquesne Univ. of the Holy Ghost, 565 Pa. 571, 591, 777 A.2d 418, 429 (2001) (citations and quotation marks omitted). “[I]t is not the function of this Court to re-write it, or to give it a construction in conflict with … the accepted and plain meaning of the language used.” Id.; citing Robert F. Felte, Inc. v. White, 451 Pa. 137, 144, 302 A.2d 347, 351 (1973) (citation omitted). Here, the language of the waiver form (Doc. 54-1, [*17] at 20) is unequivocal in stating the intent that it is binding for all time thereafter. As the Pennsylvania Supreme Court has stated,

The word “all” needs no definition; it includes everything, and excludes nothing. There is no more comprehensive word in the language, and as used here it is obviously broad enough to cover liability for negligence. If it had been the intention of the parties to exclude negligent acts they would have so written in the agreement. This paragraph of the lease is clear and unambiguous. No rules of construction are required to ascertain the intention of the parties.

Topp Copy Prods. v. Singletary, 533 Pa. 468, 472, 626 A.2d 98, 100 (1993); citing Cannon v. Bresch, 307 Pa. 31, 34, 160 A. 595, 596 (1932).

As such, the Court finds that the October 2013 waiver executed by Plaintiff was in effect during her June 2014 visit to Defendant’s property.1

2. Plaintiff’s argument that she was rushed and unable to read the original waiver in its entirety is without merit.

Plaintiff next argues that, should the Court find that the 2013 waiver was in effect in June 2014, she was rushed and therefore did not have time to read the waiver before signing it. “The law of Pennsylvania is clear. One who is about to sign a contract has a duty to read that contract [*18] first.” Hinkal v. Pardoe, 2016 Pa. Super. 11, 133 A.3d 738, 743, appeal denied, 636 Pa. 650, 141 A.3d 481 (2016); In re Estate of Boardman, 2013 PA Super 300, 80 A.3d 820, 823 (Pa.Super.2013); citing Schillachi v. Flying Dutchman Motorcycle Club, 751 F.Supp. 1169, 1174 (E.D.Pa.1990) (citations omitted). In the absence of fraud, the failure to read a contract before signing it is “an unavailing excuse or defense and cannot justify an avoidance, modification or nullification of the contract.” Germantown Sav. Bank v. Talacki, 441 Pa.Super. 513, 657 A.2d 1285, 1289 (1995) (citing Standard Venetian Blind Co. v. American Emp. Ins. Co., 503 Pa. 300, 469 A.2d 563, 566 note (1983)); see also Wroblewski v. Ohiopyle Trading Post, Inc., No. CIV.A. 12-0780, 2013 U.S. Dist. LEXIS 119206, 2013 WL 4504448, at *7 (W.D. Pa. Aug. 22, 2013) (Under Pennsylvania law, the failure to read a contract does not nullify the contract’s validity.); Arce v. U-Pull-It Auto Parts, Inc., No. 06-5593, 2008 U.S. Dist. LEXIS 10202, 2008 WL 375159, at *5-9 (E.D.Pa. Feb.11, 2008) (written release found to be enforceable even when the agreement was in English but the plaintiff only read and spoke Spanish, noting that the “[p]laintiff cannot argue that the release language was inconspicuous or somehow hidden from his attention…. Nor did Defendant have an obligation to verify that [p]laintiff had read and fully understood the terms of the document before he signed his name to it.”). In this case, there is no allegation or evidence of fraud, and as such, Plaintiff’s argument is without merit.

3. The waiver is properly conspicuous.

Finally, Plaintiff avers that summary judgment should be denied because the waiver was not properly conspicuous, and relies on the Pennsylvania Superior Court’s decision in Beck-Hummel in making [*19] this assertion. The Beck-Hummel court addressed the enforceability of a waiver of liability printed on the back of a tubing ticket. The exculpatory language appeared in a font that was “just barely readable,” and smaller than the font used for some other portions of the ticket. Id. at 1274-75. The Beck-Hummel court looked to the conspicuousness of the waiver of liability as a means of establishing whether or not a contract existed, setting forth three factors to consider in determining conspicuousness: 1) the waiver’s placement in the document; 2) the size of the waiver’s font; and 3) whether the waiver was highlighted by being printed in all capital letters or a different font or color from the remainder of the text. Beck-Hummel, 902 A.2d at 1274. After considering these factors, the Beck-Hummel court could not conclude as a matter of law that the exculpatory clause was enforceable because the language of the ticket was not sufficiently conspicuous as to put the purchaser/user on notice of the waiver. Id.at 1275.

However, in a more recent Pennsylvania Superior Court case, the court held that, as in the case presently before this Court, where the exculpatory clause was part of a signed contract between the parties, the requirements of [*20] conspicuity set forth in Beck-Hummel would not necessarily apply. In Hinkal v. Pardoe, the en banc Superior Court of Pennsylvania examined whether the Beck-Hummel conspicuity requirements for the enforcement of exculpatory clauses applies to signed valid written contracts. Hinkal v. Pardoe, 2016 Pa. Super. 11, 133 A.3d 738, 743-745, appeal denied, 636 Pa. 650, 141 A.3d 481 (2016). In Hinkal, the plaintiff had signed a membership agreement with Gold’s Gym that contained a waiver of liability for negligence claims on the back page. Id. at 741. The Hinkal court found the plaintiff’s comparison of her case to Beck-Hummel “inapposite” because, unlike a waiver printed on the back of a tubing ticket that did not require a signature; the gym waiver was part of a signed agreement. Id. at 744-45. Further, the court noted that conspicuity is generally not required to establish the formation of a contract, but “has been resorted to as a means of proving the existence or lack of a contract,” where it is unclear whether a meeting of the minds occurred, and imposing such a requirement would allow a properly executed contract to be set aside through one party’s failure to do what the law requires – reading a contract. Id. at 745. The Hinkal court concluded that the waiver of liability was valid and enforceable because [*21] the plaintiff had signed the agreement. Similarly, in Evans v. Fitness & Sports Clubs, LLC, the District Court determined that the exculpatory clauses contained in a fitness club’s membership agreements were valid and enforceable where the plaintiff had signed both a membership and personal training agreement, including an acknowledgement that the plaintiff had read and understood the entire agreement, including the release and waiver of liability, appears directly above the plaintiff’s signature on the first page of each agreement. Evans v. Fitness & Sports Clubs, LLC, No. CV 15-4095, 2016 U.S. Dist. LEXIS 133490, 2016 WL 5404464, at *6 (E.D. Pa. Sept. 28, 2016).

The Court finds the agreement at issue in this case to be far more in line with the waivers discussed by the Pennsylvania Superior and Eastern District of Pennsylvania courts in Hinkal and Evans. The waiver form in this case was two pages in length, and initialed and signed by Plaintiff. It was not, like the waiver in Beck-Hummel, printed in small font on the back of a tubing ticket. This was a waiver that was reviewed, initialed and signed by Plaintiff. As such, the requirements of conspicuity set forth in Beck-Hummel would not necessarily apply. Hinkal v. Pardoe, 133 A.3d at 743-745.

Even if those conspicuity requirements applied, however [*22] the exculpatory clauses in the Waiver Form would still be enforceable. The document is titled, in larger font, bold, underlined, and all capital letters “LOST TRAILS ATV ADVENTURES WAIVER FORM.” The language specifically indicating release and discharge, assumption of the risk, an agreement not to sue, and indemnification, are set of in all capitals in the numbered paragraphs, and were acknowledged by Plaintiff initialing each paragraph. (Doc. 54-1, at 20). Immediately above the signature line, in all capital bold letters, the release reads:

I HAVE READ THIS RELEASE OF LIABILITY, WAIVER OF LEGAL RIGHTS AND ASSUMPTIONS OF RISK AND FULLY UNDERSTAND ITS CONTENTS. I SIGN IT WILLINGLY, VOLUNTARILY AND HAVING HAD AMPLE OPPORTUNITY TO RAISE ANY QUESTIONS OR CONCERNS THAT I MAY HAVE, I ACKNOWLEDGE THAT I AM PARTICIPATING VOLUNTARILY WITH KNOWLEDGE THAT DANGERS ARE INVOLVED AND I AGREE TO ASSUME ALL THE RISKS.

(Doc. 54-1, at 21).

These clauses are conspicuously set apart, appearing in capital letters, and in the case of the final paragraph, fully set apart, in all bold and all capitals. Further, the agreement itself is titled “Waiver Form” which notifies the reader of the purpose of the form. [*23] Plaintiff initialed the paragraphs setting forth the exculpatory clauses,2 and signed the agreement directly underneath the final, most prominent waiver clause. As such, the Court finds that the exculpatory clauses are valid and enforceable. See Evans, 2016 U.S. Dist. LEXIS 133490, 2016 WL 5404464, at n. 6.

IV. Conclusion

For the reasons set forth above, the undisputed material facts in the record establish that Defendant is entitled to summary judgment. Viewing the record in light most favorable to the Plaintiff, the Court finds that the exculpatory clauses at issue are valid and enforceable. As such, Defendant’s motion will be granted, and judgment will be entered in favor of Defendant.

An appropriate Order follows.

Dated: August 29, 2018

/s/ Karoline Mehalchick

KAROLINE MEHALCHICK

United States Magistrate Judge

ORDER

AND NOW, this 29th day of August, 2018, IT IS HEREBY ORDERED that for the reasons set forth in the memorandum filed concurrently with this Order, Defendant’s motion for summary judgment (Doc. 50) is GRANTED, and judgment is entered in favor of Defendant. The Clerk of Court is directed to CLOSE this matter.

BY THE COURT:

Dated: August 29, 2018

/s/ Karoline Mehalchick

KAROLINE MEHALCHICK

United States Magistrate Judge


No written signature on the release so there is no release, even though the plaintiff acknowledged she would have signed one.

A contract requires a meeting of the minds and the agreement to contract. Even though the defendant proved the plaintiff had the intent, the defendant could not prove their own intent.

Soucy, v. Nova Guides, Inc., 2015 U.S. Dist. LEXIS 95438

State: Colorado

Plaintiff: Megan Soucy

Defendant: Nova Guides, Inc.

Plaintiff Claims: Negligence

Defendant Defenses: Release

Holding: for the Plaintiff

Year: 2015

Warning, this case is probably not over so any decision, here can be altered, changed or appealed. However, the decision is so interesting it was worth the review.

The case involves an All-Terrain Vehicle (ATV) accident. Normally, engines are outside the scope of these articles. However, the facts surrounding the incident are not at issue or even discussed. The main issue is the defense of release raised by the plaintiff.

The plaintiff, her mother and sister were visiting Colorado. While there the party contracted with the defendant for a jeep tour. During that tour, all three signed a release. Two days later, the parties came back and contracted for an ATV tour. The mother and sister signed the release, but the plaintiff did not.

The release for both activities was identical, in fact, it covered, Jeep Tours, ATV, Mtn. Bike, and Hiking in one document. Dependent upon what activity the person signed up for the appropriate box was checked. For the first tour, the box Jeep Tour was checked. The mother and sisters ATV box was checked for the second tour.

The release in the language even spoke the risks of ATV tours but all in the same sentence as the other tours.

I/We have asked to participate in the sports of mountain biking, all terrain vehicle riding, hiking, and jeep touring and related activities with Nova Guides, Inc. I understand mountain biking, all terrain vehicle use, hiking and jeep touring also include the risk of falling from said vehicles.

However, because the box for the only release the plaintiff signed was for a jeep tour, the court did not by the argument it also applied to the ATV tour.

The interrogatory answers of the plaintiff and her testimony in deposition indicated she knew releases were required, understood them, had signed them in the past and would have signed one if asked for the ATV tour.

Moreover, with respect to the tours with Nova in July 2012, Soucy testified that, had a waiver of liability been presented to her on July 11, 2012, she would have signed it. In fact, Soucy attested that she believed the waiver of liability she executed on July 9, 2012 for the Jeep tour carried over for her participation in the July 11, 2012 ATV tour.

This decision is based on a Motion for Summary judgment filed by the defendant based on “release” which was denied by the court.

Analysis: making sense of the law based on these facts.

Under Colorado law contracts can be formed orally and based on the party’s intent.

Under Colorado law, contractual conditions may be express or implied. When interpreting a contract, courts consider “the facts and circumstances attending its execution, so as to learn the intentions of the parties.

A release is an agreement that follows the rules of interpretation and construction of contracts.

By her acts of paying for and taking the ATV tour after admitting she would have signed a release the court found the necessary intent on the part of the plaintiff.

Accordingly, the Court concludes it is not disputed that Soucy paid for a commercial service, willingly received that service, and believed the waiver she signed on July 9, 2012 — in which she “assume[d] the risk of personal injury, death, and property damage … which may result from [her] participation … in … all terrain vehicle riding” and waived “any claims based on negligence or breach of warranty [she] might assert on [her] own behalf … against Nova Guides, Inc.” — was valid and necessary for her participation in the ATV tour on July 11, 2012.

However, the reason why the court dismissed the defendant’s motion for summary judgment was the court could not find the same intent on the part of the defendant.

A contract implied in fact arises from the parties’ conduct that evidences a mutual intention to enter into a contract, and such a contract has the same legal effect as an express contract. … [thus, t]o be enforceable, a contract requires mutual assent to an exchange for legal consideration.” (emphasis added). Nova has proffered no evidence of its intention that Soucy be bound by an agreement to waive liability for the ATV tour on July 11, 2012; that is, nothing in the record demonstrates that either Hilley or any Nova personnel asked Soucy to execute or otherwise agree to a waiver for that tour, either by verbally asking her or by presenting her with a written agreement. Nor has Nova provided any affidavit evidencing, or even an argument by Nova concerning, its intent for this verbal agreement.

Because the defendant could not and did not offer any evidence that it had the same intent as the plaintiff, there was no proof of the intent to contract by the defendant, and the motion was denied.

However, for an oral agreement to be enforceable, there must be mutual assent from both parties. The evidence proffered by the parties does not show that Nova intended to be bound by an agreement with Soucy to waive liability for the ATV tour on July 11, 2012. Because an issue as to this material fact exists, the Defendant’s Motion for Summary Judgment is denied.

Again, this is not a final decision. The issue can be reargued before or at trial with the defendant showing the intent to contract.

So Now What?

There are several major flaws in this case by the defendant besides not being able to prove the intent to contract. This is a classic case of making your release complicated thinking it will save your butt, and the complications created a nightmare.

The first is the defendant is using a release with check boxes. If the wrong box is checked or not checked, then the release has no value. The same thing could have been accomplished, and the case ended if the boxes were eliminated.

The second is no system to make sure the release is signed by all adults and by adults for all children before the trip starts. The classic example was a rafting company that required participants to hand in their release to receive their PFD. No release, no PFD. No PFD you could not board the bus to go to the put in.

While working for one whitewater rafting company the shop manager realized one person had not signed a release. She ran and caught the bus before it pulled out and asked who had not signed the release. No one said anything. She said OK, everyone off the bus; you can get back on when I call your name. She had every release with her, and the bus was not leaving until everyone had signed.

The non-signer, not pretty sheepish, raised his hand and was handed a release to sign.

Normally, I write releases around activities. You can cover the risks of most paddlesports in one release for kayaking, rafting, stand up paddleboards, etc. Oceans pose different threats than lakes and streams so ocean activities are on a different release.

Here, however, the release combined the risks of human powered and motorized activities. Jeep tours and ATV tours probably run similar risks. However, they also have different state laws applicable to them. Mountain biking has different risks than hiking. Dependent upon the area where the mountain biking occurs and the hiking you might be able to cover the risks in one document.

However, to be on the safe side, I think three different releases should be used. Jeep and ATV tours on one, mountain biking on the second and hiking on the third. It would be easy to track them, having each one printed on a separate color of paper. You know based upon the color of the paper on the release what the customers are expecting and where they should be going.

Don’t make your release complicated in an attempt to make it work, or make it cover too much. This is one instance where killing a few more trees to write the release may save a hundred trees in defending a lawsuit.

What do you think? Leave a comment.

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By Recreation Law       Rec-law@recreation-law.com              James H. Moss

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Soucy, v. Nova Guides, Inc., 2015 U.S. Dist. LEXIS 95438

Soucy, v. Nova Guides, Inc., 2015 U.S. Dist. LEXIS 95438

Megan Soucy, Plaintiff, v. Nova Guides, Inc., Defendant.

Civil Action No. 14-cv-01766-MEH

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

2015 U.S. Dist. LEXIS 95438

July 20, 2015, Decided

July 20, 2015, Filed

COUNSEL: [*1] For Megan Soucy, Plaintiff: Gregory A. Gold, Sommer D. Luther, LEAD ATTORNEYS, Gold Law Firm, L.L.C, The, Greenwood Village, CO; Joel Stuart Rosen, Cohen Placitella & Roth, Philadelphia, PA.

For Nova Guides, Inc., Defendant: David James Nowak, Tracy Lynn Zuckett , White & Steele, P.C., Denver, CO.

JUDGES: Michael E. Hegarty, United States Magistrate Judge.

OPINION BY: Michael E. Hegarty

OPINION

ORDER ON MOTION FOR SUMMARY JUDGMENT

Michael E. Hegarty, United States Magistrate Judge.

Before the Court is Defendant’s Motion for Summary Judgment [filed May 28, 2015; docket #18]. The motion is fully briefed, and the Court finds that oral argument will not assist in its adjudication of the motion. Based on the record herein and for the reasons that follow, the Court denies the Defendant’s motion.1

1 On September 8, 2014, the parties consented to this Court’s jurisdiction pursuant to 28 U.S.C. § 636(c).

BACKGROUND

I. Procedural History

Plaintiff Megan Soucy (“Soucy”) initiated this action on June 24, 2014, alleging essentially that Defendant Nova Guides, Inc. (“Nova”) was negligent in causing her injuries when the all-terrain vehicle (“ATV”) she was driving overturned during a trail ride. Complaint, docket #1. In response to the Complaint, Nova filed [*2] an Answer asserting 13 affirmative defenses, including “Plaintiff’s claims may be barred or limited by contracts entered into by the parties.” Answer, docket #7.

Thereafter, the Court held a Scheduling Conference on September 22, 2014 at which the Court set deadlines for discovery and the filing of dispositive motions. Dockets ## 12, 13. Discovery progressed and, well before the deadline, Nova filed the present motion for summary judgment arguing no triable issues exist as to whether Soucy contractually waived her claims in this action. See docket #18. Specifically, Nova contends that its Waiver of Liability is valid pursuant to Colorado law and the waiver is enforceable despite lacking Plaintiff’s signature. Id.

Soucy counters that she was never presented with nor signed a Waiver of Liability before the July 11, 2012 tour during which she was injured. She argues that the July 9, 2012 waiver she signed before a Jeep tour did not apply to the July 11 ATV tour, since only the Jeep tour was referenced in the July 9 waiver. She further asserts that any release that may be construed as signed on her behalf by her mother is unenforceable. Finally, Soucy contends that any evidence of her intent [*3] is factually and legally irrelevant.

Nova replies arguing that Soucy’s own testimony demonstrates she intended to be bound by the Waiver of Liability, despite its lack of her signature.

II. Findings of Fact

The Court makes the following findings of fact viewed in the light most favorable to Soucy, who is the non-moving party in this matter.

1. While vacationing in Vail, Colorado in July 2012, Soucy, her mother, and her sisters participated in a jeep tour on July 9, 2012 and an ATV tour on July 11, 2012, both guided by Ben Hilley of Nova Guides, Inc. Deposition of Megan Soucy, April 6, 2015 (“Soucy Depo”), 97: 20-25; 129: 12 – 130: 16, docket #19-1.

2. Soucy was 20 years old in July 2012. Id., 136: 23 – 137: 4.

3. Based on her past experience, Soucy understood she must typically execute a waiver of liability before engaging in activities such as “ATVing” and the “safari trip” (also referred to as the “Jeep tour”). Id., 143: 13-20; 145: 16-20.

4. Prior to participating in the Jeep tour on July 9, 2012, Soucy signed a Lease Agreement and Waiver of Liability, on which a handwritten check mark appears next to “Jeep tour” as the type of tour selected (the other options are “ATV,” “Mtn. Bike,” and “Hiking”). Id., 144: [*4] 4-145: 7; see also Nova Guides Lease Agreement and Waiver of Liability, July 9, 2012, docket #19-2.

5. Nova’s Waiver of Liability includes the following language:

PARTICIPANT’S AGREEMENT TO ASSUME THE RISKS OF PERSONAL INJURY AND PROPERTY DAMAGE ASSOCIATED WITH MOUNTAIN BIKING, ALL TERRAIN VEHICLE RIDING, HIKING, AND JEEP TOURS AND TO RELEASE NOVA GUIDES, INC., ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, THE U.S. FOREST SERVICE, AND THE U.S. GOVERNMENT FROM ANY AND ALL LIABILITY IN CONNECTION WITH MOUNTAIN BIKING, ALL TERRAIN VEHICLE RIDING, HUMMER AND JEEP TOURING ACTIVITIES.

*THIS IS A RELEASE OF LIABILITY. PLEASE READ BEFORE SIGNING. DO NOT SIGN OR INITIAL THE RELEASE IF YOU DO NOT UNDERSTAND OR DO NOT AGREE WITH ITS TERMS.

1. I/We have asked to participate in the sports of mountain biking, all terrain vehicle riding, hiking, and jeep touring and related activities with Nova Guides, Inc. … I understand mountain biking, all terrain vehicle use, hiking and jeep touring also include the risk of falling from said vehicles. I understand that accidents or illness can occur in remote places without medical facilities. … I understand that route or activity, chosen as a part of our outdoor [*5] adventure may not be the safest, but has been chosen for its interest. I UNDERSTAND THAT THE ACTIVITIES OF MOUNTAIN BIKING, ALL TERRAIN VEHICLE RIDING, HIKING, JEEP TOURING, like all outdoor activities involve the risk of contact with wild animals, falls, equipment failure, collisions and/or contact with manmade or natural objects and other riders and drivers which can result in personal injury, property damage and death.

2. I expressly assume all risk of personal injury, death, and property damage set forth in paragraph 1 above which may result from my participation and my minor children’s participation in mountain biking, all terrain vehicle riding, hiking, and jeep touring and waive any claims based on negligence or breach of warranty I might assert on my own behalf or on behalf of my minor children against Nova Guides, Inc., its officers, directors, agents and employees, the U.S. Forest Service, and the U.S. Government for personal injuries, death, and/or property damage sustained while participating in mountain biking activities, all terrain vehicle riding, hummer and jeep touring with Nova Guides, Inc.

Nova Guides Lease Agreement and Waiver of Liability, docket #19-2.

6. Soucy recognized [*6] that operating an ATV involves a risk of injury. Id.; see also Soucy Depo, 154: 8-13.

7. Prior to Soucy’s and her family’s participation in the ATV tour on July 11, 2012, Soucy’s mother, Susan Pesot, completed and signed a Lease Agreement and Waiver of Liability, on which a handwritten check mark appears next to “ATV” as the type of tour selected. Deposition of Susan Pesot, April 7, 2015 (“Pesot Depo”), 92: 2 – 93: 7; see also Nova Guides Lease Agreement and Waiver of Liability, July 11, 2012, docket #19-3.

8. Soucy did not sign the July 11, 2012 Waiver of Liability. Id.

9. Pesot signed the waiver only on behalf of herself and her two minor children (Soucy’s sisters). Pesot Depo, 92: 12-17. She listed Soucy and Soucy’s other sister as participants on the ATV tour “because Ben told [her] to write down all the people who will be driving the vehicles.” Id., 93: 2-13.

10. Pesot did not sign the waiver on behalf of Soucy, who was not a minor, nor asked Soucy to sign the waiver because “that was not [her] responsibility to have [Soucy] sign it.” Id., 92: 12-25, 93: 1.

11. Also, Hilley did not ask Soucy to sign the waiver; however, Soucy would have signed the Waiver of Liability completed by Pesot on July 11, [*7] 2012, had it been presented to her by Hilley or Pesot and she were asked specifically to sign it. Soucy Depo, 215: 4-8 and 217: 7-15.

12. Soucy thought the Waiver of Liability she signed on July 9, 2012 “carried over” for the ATV tour in which she participated on July 11, 2012. Id., 144: 4 – 145:14.

13. Soucy participated in the ATV tour on July 11, 2012. Id., 171: 17-21.

LEGAL STANDARDS

A motion for summary judgment serves the purpose of testing whether a trial is required. Heideman v. S. Salt Lake City, 348 F.3d 1182, 1185 (10th Cir. 2003). The Court shall grant summary judgment if the pleadings, depositions, answers to interrogatories, admissions, or affidavits show there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). A fact is material if it might affect the outcome of the suit under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).

The moving party bears the initial responsibility of providing to the Court the factual basis for its motion. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). “The moving party may carry its initial burden either by producing affirmative evidence negating an essential element of the nonmoving party’s claim, or by showing that the nonmoving party does not have enough evidence to carry its burden of persuasion at trial.” Trainor v. Apollo Metal Specialties, Inc., 318 F.3d 976, 979 (10th Cir. 2002). Only admissible evidence [*8] may be considered when ruling on a motion for summary judgment. World of Sleep, Inc. v. La-Z-Boy Chair Co., 756 F.2d 1467, 1474 (10th Cir. 1985).

The non-moving party has the burden of showing there are issues of material fact to be determined. Celotex, 477 U.S. at 322. That is, if the movant properly supports a motion for summary judgment, the opposing party may not rest on the allegations contained in his complaint, but must respond with specific facts showing a genuine factual issue for trial. Fed. R. Civ. P. 56(e); Scott v. Harris, 550 U.S. 372, 380, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (2007) (“[t]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.”) (emphasis in original) (citation omitted); see also Hysten v. Burlington Northern & Santa Fe Ry., 296 F.3d 1177, 1180 (10th Cir. 2002). These specific facts may be shown “‘by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings themselves.'” Pietrowski v. Town of Dibble, 134 F.3d 1006, 1008 (10th Cir. 1998) (quoting Celotex, 477 U.S. at 324). “[T]he content of summary judgment evidence must be generally admissible and . . . if that evidence is presented in the form of an affidavit, the Rules of Civil Procedure specifically require a certain type of admissibility, i.e., the evidence must be based on personal knowledge.” Bryant v. Farmers Ins. Exch., 432 F.3d 1114, 1122 (10th Cir. 2005). “The court views the record and draws all inferences in the light most favorable to the non-moving party.” [*9] Pepsi-Cola Bottling Co. of Pittsburg, Inc. v. Pepsico, Inc., 431 F.3d 1241, 1255 (10th Cir. 2005).

ANALYSIS

Here, it is undisputed that Soucy did not sign a form waiver of liability for the ATV tour guided by Nova on July 11, 2012. According to Soucy, that is the end of the story. However, Nova argues the lack of a signature on a written agreement “is not always necessary to create a binding agreement.” Motion, docket #18 at 10. Nova contends that Colorado law allows consideration of the parties’ intent in the formation of a contract. Id. Soucy counters that extrinsic evidence, such as the parties’ intent, “is not admissible in a case where the court properly determines as a matter of law that an agreement is unambiguous.” Response, docket #19 at 17. Soucy argues alternatively that, “whether the parties have entered a contract is a question of fact.” Id. at 18.

The Court finds that, because Soucy does not challenge the validity and enforceability of Nova’s waiver of liability, the question is not whether terms of a formal contract are ambiguous (since no formal contract exists between Soucy and Nova from July 11, 2012), but whether an agreement between Soucy and Nova was formed on July 11, 2012 before Soucy was injured on the tour.

Under Colorado law, contractual conditions may be express [*10] or implied. Lane v. Urgitus, 145 P.3d 672, 679 (Colo. 2006) (determining whether an agreement to arbitrate existed between the parties) (citing Goodson v. Am. Standard Ins. Co., 89 P.3d 409, 414 (Colo. 2004)). When interpreting a contract, courts consider “the facts and circumstances attending its execution, so as to learn the intentions of the parties.” Id. (quoting Eisenhart v. Denver, 27 Colo. App. 470, 478, 150 P. 729, (1915), aff’d, 64 Colo. 141, 170 P. 1179 (1918)). “In contractual settings, [courts] can look to the circumstances surrounding the contract’s formation in construing the contract, in order to carry out the intent of the contracting parties.” Id. (citing Lazy Dog Ranch v. Telluray Ranch Corp., 965 P.2d 1229, 1235 (Colo. 1998)); see also James H. Moore & Assocs. Realty, Inc. v. Arrowhead at Vail, 892 P.2d 367, 372 (Colo. App. 1994) (“Generally, whether a contract exists is a question of fact to be determined by all of the surrounding circumstances.”).

Whether the parties to an oral agreement become bound prior to the drafting and execution of a contemplated formal writing is a question largely of intent on their part. Mohler v. Park Cnty. Sch. Dist. RE-2, 32 Colo. App. 388, 515 P.2d 112, 114 (Colo. App. 1973). “That intent can be inferred from their actions and may be determined by their conduct prior to the time the controversy arose.” Id. (citing Coulter v. Anderson, 144 Colo. 402, 357 P.2d 76 (Colo. 1960)); see also Moore, 892 P.2d at 372.

“A release [of liability] is an agreement to which the general rules of interpretation and construction apply.” Squires v. Breckenridge Outdoor Educ. Ctr., 715 F.3d 867, 878 (10th Cir. 2013). In Squires, the court analyzed extrinsic evidence including a letter and the plaintiff’s statements of belief to determine whether a waiver of liability was [*11] procured through fraudulent inducement. Id. at 878-79.

Here, in response to questions by Nova’s counsel, Soucy testified during her deposition that:

o Based on her past experience, she understood she must typically execute a waiver of liability before engaging in activities such as “ATVing” and the “Jeep tour”;

o Prior to participating in the Jeep tour on July 9, 2012, she signed a Nova Guides Lease Agreement and Waiver of Liability;

o She recognized that operating an ATV involves a risk of injury;

o She did not sign an identical form Waiver of Liability prior to participating in the ATV tour on July 11, 2012;

o She would have signed the Waiver of Liability completed by her mother on July 11, 2012, had it been presented to her by Hilley or her mother and she were asked specifically to sign it; and

o She thought the Waiver of Liability she signed on July 9, 2012 “carried over” for the ATV tour in which she participated on July 11, 2012.

While Soucy’s counsel asked her questions during the deposition, his questions did not concern any waiver of liability. Soucy Depo, 254: 9 – 255: 17. In addition, Soucy did not provide an affidavit or other testimony in response to the present motion. Nova argues that [*12] “the clear, undisputed evidence from plaintiff’s own testimony is that she intended to assent and be bound by Nova Guide’s Waiver of Liability when she participated in the July 11, 2012 ATV tour.” Reply, docket #22 at 5. The Court must agree.

At her deposition, Soucy confirmed not only that she understood the concept of a waiver of liability, but also that she was familiar with such a document, as she had executed waivers in the past.

Q. Are you familiar with the concept of a waiver of liability?

A. Yes.

Q. Have you executed those type of documents in certain situations where you wanted to do an activity and it required a waiver?

A. Yes, yes.

Soucy Depo, 125: 1-7. Moreover, with respect to the tours with Nova in July 2012, Soucy testified that, had a waiver of liability been presented to her on July 11, 2012, she would have signed it. Id., 215: 4-8 and 217: 7-15. In fact, Soucy attested that she believed the waiver of liability she executed on July 9, 2012 for the Jeep tour carried over for her participation in the July 11, 2012 ATV tour.

Q. — did you understand before engaging in an activity such as ATV’ing, that you would typically execute a waiver of liability?

THE WITNESS: Yes.

Q. So that’s [*13] something you were familiar with. Did you at the time think that that was the document that he gave your mother?

A. I think, actually, the day before, when we got on that thing, Melissa and I filled something out.

Q. So you think that when you kind of took the safari trip —

A. Right.

Q. — where you were in a vehicle, that you actually filled something out?

A. We may have, yeah.

Q. You, yourself, as opposed to your mother?

A. Yes.

Q. Did you read it?

A. I don’t remember.

Q. Do you remember what it was or what it said?

A. No.

Q. And when you say “we,” do you mean you and all your sisters?

A. Melissa and I, separate from my mom.

Q. Did your mother also execute a document on the safari trip?

A. I believe so.

Q. And did Mr. Hilley, on the safari trip, explain what you were executing?

A. I don’t remember.

Q. Did you at the time think it was a waiver of liability?

A. Yeah. I think– and that’s why when we were in the car the next day, I just thought that kind of carried over or something.

Q. So when you were in the bus, going to do the ATV tour, you thought that what you had signed the day before carried over?

THE WITNESS: Right.

Q. But you generally understood that with respect to these type of activities, [*14] you did need to execute a waiver of liability?

THE WITNESS: Yes.

Soucy Depo, 143: 16 – 145: 20. Importantly, Soucy then participated in the ATV tour on July 11, 2012, which presumes that Soucy paid the required fee and Nova performed the requested service of guiding the tour. Soucy’s testimony does not appear to be vague. She assents to the proposition that she believed a waiver of liability she actually signed relating to one activity applied to another activity as well. She does not attempt to contradict that sworn testimony, so it was uncontroverted.

Accordingly, the Court concludes it is not disputed that Soucy paid for a commercial service, willingly received that service, and believed the waiver she signed on July 9, 2012 — in which she “assume[d] the risk of personal injury, death, and property damage … which may result from [her] participation … in … all terrain vehicle riding” and waived “any claims based on negligence or breach of warranty [she] might assert on [her] own behalf … against Nova Guides, Inc.” — was valid and necessary for her participation in the ATV tour on July 11, 2012.

However, an agreement requires intent to be bound by all parties. “A contract implied in [*15] fact arises from the parties’ conduct that evidences a mutual intention to enter into a contract, and such a contract has the same legal effect as an express contract. … [thus, t]o be enforceable, a contract requires mutual assent to an exchange for legal consideration.” Winter v. Indus. Claim Appeals Office, 321 P.3d 609, 614, 2013 COA 126 (Colo. App. 2013) (citations omitted) (emphasis added). Nova has proffered no evidence of its intention that Soucy be bound by an agreement to waive liability for the ATV tour on July 11, 2012; that is, nothing in the record demonstrates that either Hilley or any Nova personnel asked Soucy to execute or otherwise agree to a waiver for that tour, either by verbally asking her or by presenting her with a written agreement. Nor has Nova provided any affidavit evidencing, or even an argument by Nova concerning, its intent for this verbal agreement. Under the circumstances presented here, the Court will not infer such intention. See Celotex Corp., 477 U.S. at 323 (the moving party bears the initial responsibility of providing to the court the factual basis for its motion).

Accordingly, a genuine issue of material fact exists as to whether an agreement was formed by both parties on July 11, 2012 before Soucy participated in the ATV tour and, thus, summary judgment is [*16] improper.

CONCLUSION

Soucy’s deposition testimony reflects her conduct, beliefs and intent regarding whether she agreed to waive Nova’s liability for any negligence claims resulting from the ATV tour on July 11, 2012. No genuine issues of material fact arise from this testimony or any other evidence provided by Soucy as to whether her assent to such agreement existed. The Court must conclude, then, that the evidence demonstrates Soucy’s agreement to waive Nova’s liability for the injuries she suffered on July 11, 2012.

However, for an oral agreement to be enforceable, there must be mutual assent from both parties. The evidence proffered by the parties does not show that Nova intended to be bound by an agreement with Soucy to waive liability for the ATV tour on July 11, 2012. Because an issue as to this material fact exists, the Defendant’s Motion for Summary Judgment [filed May 28, 2015; docket #18] is denied.

Entered and dated at Denver, Colorado, this 20th day of July, 2015.

BY THE COURT:

/s/ Michael E. Hegarty

Michael E. Hegarty

United States Magistrate Judge


Retailers in a minority of states may have a defense to product liability claims when they have nothing to do with the manufacture of the product.

The Passive-Retailer doctrine provides a defense for companies in the supply chain who have no hand, influence or part of the manufacturing process. The key word in the defense is the word passive.

Mcquivey v. Fulmer Helmets, Inc., 2014 UT App 177; 335 P.3d 361; 766 Utah Adv. Rep. 32; 2014 Utah App. LEXIS 184; CCH Prod. Liab. Rep. P19,438

State: Utah, Court of Appeals of Utah

Plaintiff: Jamie Mcquivey

Defendant: Kim Yong Lung Industrial (KYL), which manufactured the helmet in Taiwan; Fulmer Helmets, which distributed the helmet throughout the American market; and White Knuckle Motor Sports, which sold the helmet

Plaintiff Claims: strict liability for defective design as well as negligence and failure to warn, Utah Product Liability Act

Defendant Defenses: Passive retailer defense

Holding: For the plaintiff

Year: 2014

The facts in this case are a little outside of the normal facts written about here. However, the defense in the case is rare and the opportunity to write about the case is important.

This case involves a helmet that failed during an ATV accident. The eight-year-old son of the plaintiff was riding an ATV when he crashed. His helmet cracked, and the helmet cut his face. The mother sued the Manufacturer, the importer distributor and the retailer.

The manufacturer and retailer were dismissed from the case leaving only the importer, Fulmer. The retailer was dismissed because “White Knuckle [retailer] had neither knowledge of potential defects nor influence over the helmet’s design, safety, or manufacturing.” The manufacturer was dismissed because it moved to dismiss for lack of personal jurisdiction.

The importer/defendant then moved to dismiss based on the theory that Fulmer was a passive retailer and could not be held liable for the defects in the helmet. The district court agreed and dismissed Fulmer. The plaintiff appealed that decision leading to this appeal.

Analysis: making sense of the law based on these facts.

The court first went through Utah Product liability law.

Under general principles of tort law, “as between an injured buyer of a product, and the seller of the product, the seller must bear the liability.”

Under Utah’s Product Liability Act, a “manufacturer or other initial seller” who sells an “unreasonably dangerous product” may be liable for resulting “personal injury, death, or property damage.”

Under Utah’s law, strict liability does not require proof of fault, only that the manufacturer sold a defective helmet.

The court then defined the Passive-Retailer Doctrine.

The passive-retailer doctrine creates an exception to strict liability under the Product Liability Act for “passive retailers”–sellers who do not “participate in the design, manufacture, engineering, testing, or assembly” of a product. Under this doctrine, “a passive retailer is not subject to a strict liability claim . . . where the manufacturer is a named party to the action.” The passive-retailer doctrine thus allows the trial court to dismiss a strict-liability claim against a codefendant when undisputed facts establish that no fact finder could, under principles of comparative fault, apportion fault to that codefendant. In this circumstance, “as long as [the actual manufacturer] is present in the suit, there remains no reason to require [a passive retailer] to incur the time and expense of defending” the action.

This is a defense for retailers, that has been adopted by a minority of states. It makes sense in today’s world of prepackaged products that are too complicated for the normal retailer to understand.

This decision found legislatures in Nebraska, Delaware, Idaho, Kansas, Iowa, Maryland, Minnesota, Missouri, North Dakota, Tennessee and Washington had adopted a variation of the doctrine. Courts in Texas, New York, and Oklahoma adopted  the doctrine.

In Utah, the doctrine only was used twice. However, in this case this court found the doctrine did not apply. The defendant Fulmer did more than merely import and sell the helmets.

The defendant’s name was on the helmets, and they were marketed as Fulmer’s helmets. Fulmer reviewed the design of the helmets, tested samples and made changes to the samples. Fulmer performed on-site visits to the manufacturing facility twice annually. Fulmer required the helmets to be manufactured to US DOT standards.

Finally, we note that Fulmer holds itself out to the public as the manufacturer of the helmets that bear its name. Under Second Restatement of Torts, “[o]ne who puts out as his own product a chattel manufactured by another is subject to the same liability, as though he were its manufacturer.” Restatement (Second) of Torts § 400 (1965). “[O]ne puts out a chattel as his own product when he puts it out under his name or affixes to it his trade name or trademark.”

This level of participation was found by the court to be more than passive. The court based on this review found the defendant importer did not qualify for the defense of the Passive Retailer doctrine and sent the case back for trial.

So Now What?

The product liability laws in the US were developed to protect people. That worked when everyone in the supply chain from the manufacturer to the retailer could identify a defect and stop the sale of a defective product. That time ended when we moved from a “general store” to the current marketing system we use today.

If you are a retailer, you should investigate if the Passive-Retailer Doctrine applies to you in your state. Find out what you need to do to make sure you understand the doctrine and how you must work to be afforded its protection.

If you are a manufacturer, you need to understand who in your supply chain may be subject to this defense and keep that in mind when dealing with everyone in your supply chain to keep the defense viable.

What do you think? Leave a comment.

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Mcquivey v. Fulmer Helmets, Inc., 2014 UT App 177; 335 P.3d 361; 766 Utah Adv. Rep. 32; 2014 Utah App. LEXIS 184; CCH Prod. Liab. Rep. P19,438

Mcquivey v. Fulmer Helmets, Inc., 2014 UT App 177; 335 P.3d 361; 766 Utah Adv. Rep. 32; 2014 Utah App. LEXIS 184; CCH Prod. Liab. Rep. P19,438

Jamie Mcquivey, Plaintiff and Appellant, v. Fulmer Helmets, Inc., Defendant and Appellee.

No. 20121056-CA

COURT OF APPEALS OF UTAH

2014 UT App 177; 335 P.3d 361; 766 Utah Adv. Rep. 32; 2014 Utah App. LEXIS 184; CCH Prod. Liab. Rep. P19,438

July 31, 2014, Filed

PRIOR HISTORY: [**1] Fourth District Court, Provo Department. The Honorable Claudia Laycock. No. 090403384.

COUNSEL: Mark R. Taylor, Henry N. Didier Jr., and P. Alexander Gillen, Attorneys for Appellant.

Julianne P. Blanch and Tsutomu L. Johnson, Attorneys for Appellee.

JUDGES: JUDGE J. FREDERIC VOROS JR. authored this Opinion, in which JUDGE JOHN A. PEARCE concurred. JUDGE JAMES Z. DAVIS concurred in the result.

OPINION BY: J. FREDERIC VOROS JR.

OPINION

VOROS, Judge:

[*P1] Eight-year-old Conway Cook crashed an all-terrain vehicle while wearing a protective helmet. Instead of protecting him, the helmet cracked and injured his face. Conway’s mother sued various defendants on his behalf. The district court dismissed the claim against Fulmer Helmets, Inc. under the passive-retailer doctrine. We reverse and remand for further proceedings.

BACKGROUND 1

1 [HN1] When reviewing a district court’s rulings on a summary judgment motion, we recite all facts and fair inferences in the light most favorable to the nonmoving party. Poteet v. White, 2006 UT 63, ¶ 7, 147 P.3d 439.

[*P2] In 2008, Conway Cook drove his ATV down a dirt path, trailing his grandfather’s truck. Conway wore a Fulmer Blade AF-C1, a helmet designed for children. While driving along the path, Conway hit a shallow ditch. The impact ejected Conway and flipped [**2] the ATV. The helmet’s chinguard snapped on impact, and the sharp edge of the now-serrated plastic guard cut deeply into Conway’s face. His injuries were serious and will require lifelong care and future surgeries.

[*P3] On Conway’s behalf, his mother, Jamie McQuivey, sued three parties: Kim Yong Lung Industrial (KYL), which manufactured the helmet in Taiwan; Fulmer Helmets, which distributed the helmet throughout the American market; and White Knuckle Motor Sports, which sold the helmet to Conway’s father. Against Fulmer, McQuivey alleged strict liability for defective design as well as negligence and failure to warn.

[*P4] The district court dismissed McQuivey’s claims against both KYL and White Knuckle. McQuivey stipulated to White Knuckle’s dismissal because the evidence showed that White Knuckle had neither knowledge of potential defects nor influence over the helmet’s design, safety, or manufacturing. KYL moved to dismiss the claims against it for lack of personal jurisdiction. Fulmer and McQuivey did not oppose the motion, and the district court granted it, leaving Fulmer as the lone defendant.

[*P5] Fulmer moved for summary judgment. Fulmer argued that, as a passive retailer, it could not be [**3] held liable for defects in the helmet. The district court agreed and dismissed all claims against Fulmer, terminating the litigation.

ISSUE AND STANDARD OF REVIEW

[*P6] McQuivey contends that the district court erred in granting summary judgment for Fulmer on the ground that it qualifies as a passive retailer. [HN2] We review a district court’s “legal conclusions and ultimate grant or denial of summary judgment for correctness . . . and view[] the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party.” Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citation and internal quotation marks omitted). Furthermore, “[t]he determination of whether a passive seller of a product can be held strictly liable under the Utah Liability Reform Act . . . is based on the trial court’s interpretation of a statute, which we review for correctness without deference to the trial court’s conclusions.” Yirak v. Dan’s Super Mkts., Inc., 2008 UT App 210, ¶ 3, 188 P.3d 487 (citation and internal quotation marks omitted).

ANALYSIS

[*P7] McQuivey contends that the district court improperly applied the passive-retailer doctrine to Fulmer and thus erred in dismissing Fulmer from the case. She argues that Fulmer does not qualify as a passive retailer because “[Fulmer] is not passive in the design, manufacturing, [**4] and testing of the helmets bearing its name.” Fulmer responds that it qualifies as a passive retailer because it “does not design or manufacture helmets.”

[*P8] [HN3] Under general principles of tort law, “as between an injured buyer of a product, and the seller of the product, the seller must bear the liability.” Sanns v. Butterfield Ford, 2004 UT App 203, ¶ 15, 94 P.3d 301. Utah has long recognized a cause of action against the seller of defective products. Hahn v. Armco Steel Co., 601 P.2d 152, 158 (Utah 1979). Under Utah’s Product Liability Act, a “manufacturer or other initial seller” who sells an “unreasonably dangerous product” may be liable for resulting “personal injury, death, or property damage.” Utah Code Ann. § 78B-6-703(1) (LexisNexis 2008). And under the Second Restatement of Torts, section 402A, the commercial seller of a defective product may be held strictly liable–liable without proof of fault–for harm caused by the product:

One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if (a) the seller is engaged in the business of selling such a product, and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

Restatement (Second) of Torts § 402A (1965) expressly [**5] adopted in Hahn, 601 P.2d at 158. Thus, because “strict liability does not require an examination of a party’s fault,” a manufacturer or other initial seller can be held liable for a defective product regardless of its degree of fault. Sanns, 2004 UT App 203, ¶ 14 n.5, 94 P.3d 301. However, these rules exist in tension with another feature of Utah tort law: comparative fault.

[*P9] Comparative fault became the law of Utah in 1986. Before that time, Utah applied the common-law rule of joint-and-several liability. Under joint-and-several liability, “a tortfeasor was potentially liable for the entire amount of a plaintiff’s damages, irrespective of what proportion of fault was actually attributable to that individual tortfeasor as opposed to another joint tortfeasor.” National Serv. Indus. v. B.W. Norton Mfg. Co., 937 P.2d 551, 554 (Utah Ct. App. 1997). In 1986, the Utah Legislature enacted the Liability Reform Act. See Utah Code Ann. § 78B-5-820(1) (LexisNexis 2008). [HN4] The Act replaced the rule of joint-and-several tort liability with a rule of comparative fault. A plaintiff’s “recovery of damages under the Product Liability Act is proportionate to the percentage of fault attributable to each defendant.” Yirak, 2008 UT App 210, ¶ 4, 188 P.3d 487. The Act defines “fault” to include strict liability. Utah Code Ann. § 78B-5-817(2) (LexisNexis 2008). Consequently, a plaintiff in a products-liability case may recover from each defendant only [**6] in proportion to that defendant’s fault (including strict liability).2

2 We previously noted that the legislature’s “inclusion of ‘strict liability’ in defining ‘fault’ is confusing and somewhat problematic because unlike negligence, strict liability does not require an examination of a party’s fault.” Sanns v. Butterfield Ford, 2004 UT App 203, ¶ 14 n.5, 94 P.3d 301. “The use of strict liability in this statutory definition should be viewed only as a cause of action subject to the [Liability Reform Act], rather than changing the traditional use of the term fault to somehow include strict liability, a liability concept that is unconcerned with fault in the usual sense of culpability.” Id.

[*P10] Tension inheres between the principles of Utah’s comparative-fault statute and Utah’s products-liability statute because together they require a finder of fact to apportion relative fault to a codefendant whose liability does not depend on fault as commonly understood in tort law. In response to this tension, this court devised the passive-retailer doctrine.

[*P11] [HN5] The passive-retailer doctrine creates an exception to strict liability under the Product Liability Act for “passive retailers”–sellers who do not “participate in the design, manufacture, engineering, testing, or [**7] assembly” of a product. Sanns, 2004 UT App 203, ¶ 21, 94 P.3d 301. Under this doctrine, “a passive retailer is not subject to a strict liability claim . . . where the manufacturer is a named party to the action.” Yirak v. Dan’s Super Mkts. Inc., 2008 UT App 210, ¶ 5, 188 P.3d 487. The passive-retailer doctrine thus allows the trial court to dismiss a strict-liability claim against a codefendant when undisputed facts establish that no fact finder could, under principles of comparative fault, apportion fault to that codefendant. In this circumstance, “as long as [the actual manufacturer] is present in the suit, there remains no reason to require [a passive retailer] to incur the time and expense of defending” the action. Sanns, 2004 UT App 203, ¶ 21, 94 P.3d 301.3

3 Other jurisdictions have sought to protect passive sellers from the effects of section 402A in other ways or left them unprotected. Some jurisdictions that adopted section 402A sought to protect passive sellers with legislation prohibiting a strict-liability suit against a seller unless the seller either manufactures the product or participates in the manufacture of the product. See, e.g., Ga. Code Ann. § 51-1-11.1 (2000); Ind. Code § 34-20-2-3 (2008); Neb. Rev. Stat. § 25-21,181 (2008). Other jurisdictions have enacted legislation prohibiting strict-liability suits against passive sellers unless no remedy exists against the manufacturer. See, e.g., Del. Code Ann. tit. 18, § 7001 (1999); Idaho Code Ann. § 6-1407(4) (2010); [**8] Iowa Code § 613.18 (West 1999); Kan. Stat. Ann. § 60-3306 (Supp. 2012); Ky. Rev. Stat. Ann. § 411.340 (LexisNexis 2005); Md. Code Ann., Cts. & Jud. Proc. § 5-405 (LexisNexis 2013); Minn. Stat. Ann. § 544.41 (West 2010); Mo. Ann. Stat. § 537.762 (West 2008); N.C. Gen. Stat. Ann. § 99B-2 (2013); N.D. Cent. Code § 28-01.3-04 (2006); Tenn. Code Ann. § 29-28-106 (Supp. 2013); Wash. Rev. Code Ann. § 7-72.040(2) (West 2007). And a significant number of jurisdictions that adopted section 402A have not enacted any legislation to protect passive sellers and continue to subject passive sellers to strict liability. See, e.g., Clark v. Williamson, 129 F. Supp. 2d 956, 959 (S.D. Miss. 2000) (applying Mississippi law and holding that a passive retailer could be strictly liable in products-liability suit); Oser v. Wal-Mart Stores, Inc., 951 F. Supp. 115, 119 (S.D. Tex. 1996) (holding that a plaintiff injured by a defective shopping bag can sue the passive retailer); Nichols v. Agway, Inc., 280 A.D.2d 889, 720 N.Y.S.2d 691, 692 (N.Y. App. Div. 1994) (confirming that retailers are subject to strict-liability suits but dismissing on other grounds); Honeywell v. GADA Builders, Inc., 2012 OK CIV APP 11, 271 P.3d 88, 95 (Okla. Civ. App. 2011) (“The rationale for imposing strict liability on retailers and distributors is founded upon the public interests in human safety. . . .”).

[*P12] This court has applied the passive-retailer doctrine only twice.4 In Sanns, a van in which Sanns was a passenger rolled several times. Id. ¶ 2. Sanns sued both the manufacturer–Ford Motor Company–and the retailer– Butterfield Ford. Id. ¶ 3. We held that Butterfield Ford qualified as a passive retailer because it “did not participate in the design, manufacture, engineering, testing, or assembly of the van.” Id. ¶ 21. [**9] As a result, we concluded, “The strict liability ‘fault’ in this case, if any, lies with the manufacturer, not with Butterfield Ford, the passive retailer.” Id. Consequently, we held that “the trial court was correct to dismiss Butterfield Ford.” Id.

4 The Utah Supreme Court has yet to address or apply the passive-retailer doctrine.

[*P13] This court again applied the passive-retailer doctrine in Yirak, 2008 UT App 210, 188 P.3d 487. After discovering a piece of glass in her prepackaged salad, Yirak sued both the seller–Dan’s Super Markets–and the manufacturer–Dole. Id. ¶¶ 2, 5 n.3. However, Dan’s submitted undisputed evidence that it did not “manufacture, design, repackage, label, or inspect the prepackaged salads supplied by Dole.” Id. ¶ 7. Consequently, we held that Dan’s qualified as a passive retailer. Id. ¶ 8.

[*P14] Notably, the passive retailers in Sanns and Yirak did not Participate in the creation of the defective or unreasonably dangerous products at issue in those cases–they did not participate in the products’ design, manufacture, or testing. See Sanns v. Butterfield Ford, 2004 UT App 203, ¶ 21, 94 P.3d 301; Yirak, 2008 UT App 210, ¶ 7, 188 P.3d 487. They were thus not “in a position to eliminate the unsafe character of the product and prevent the loss,” one of the rationales for imposing strict liability. See Hebel v. Sherman Equip., 92 Ill. 2d 368, 442 N.E.2d 199, 205, 65 Ill. Dec. 888 (Ill. 1982).

[*P15] In contrast, [**10] McQuivey presented evidence demonstrating that Fulmer did participate in the manufacture, design, and testing of the helmets that bear its name. First, Fulmer participates in helmet design. Fulmer receives sample helmets from KYL to ensure that they fit properly. One of Fulmer’s representatives stated, “[W]e might have to tell [KYL] this is tight here or loose here and they change something about the comfort padding perhaps to–to adjust the way it fits. But we work through that.” Fulmer also designs the helmets’ graphics and tags.5 Though relatively slight, this degree of involvement in helmet design distinguishes Fulmer from Dan’s and Butterfield Ford, who had no role in the design of the products they sold.

5 Fulmer’s tags contain explicit warnings, instructions for sizing, and a directive stating, “If helmet experiences a severe blow, return it to the manufacturer for competent inspection or destroy and replace it.” Below this direction, in all capital letters, the tag reads, “FULMER HELMETS, INC.”

[*P16] Fulmer also participates in the helmets’ manufacture. Fulmer performs on-site visits to KYL’s helmet factory twice annually. Fulmer examines KYL’s quality-control procedures. Furthermore, Fulmer [**11] requires that KYL manufacture its helmets in compliance with United States Department of Transportation standards, “100 percent, every helmet, all the time.” This level of involvement constitutes “participation” in the manufacturing process. See Sanns, 2004 UT App 203, ¶ 21, 94 P.3d 301.

[*P17] Fulmer also participates in the helmets’ testing. Fulmer requires that KYL test all Fulmer helmets, and Fulmer itself has the helmets tested “from time to time.” As mentioned above, Fulmer test-fits helmets and then instructs KYL to make changes accordingly. Furthermore, Fulmer has had helmets tested “both in KYL as well as in labs in the United States” to ensure that all helmets comply with U.S. standards.

[*P18] Finally, we note that Fulmer holds itself out to the public as the manufacturer of the helmets that bear its name. Under Second Restatement of Torts, “[o]ne who puts out as his own product a chattel manufactured by another is subject to the same liability as though he were its manufacturer.” Restatement (Second) of Torts § 400 (1965). “[O]ne puts out a chattel as his own product when he puts it out under his name or affixes to it his trade name or trademark.” Id., § 400 cmt. d. Courts typically refer to this as the “apparent-manufacturer doctrine.” Long v. United States Brass Corp., 333 F. Supp. 2d 999, 1002 (D. Colo. 2004) (citing Yoder v. Honeywell Inc., 104 F.3d 1215, 1223 (10th Cir. 1997)). “The primary rationale for imposing [**12] liability on the apparent manufacturer of a defective product is that it induced the purchasing public to believe that it is the actual manufacturer, and . . . [thus] to purchase the product in reliance on the apparent manufacturer’s reputation and skill in making it.” Hebel, 442 N.E.2d at 203 (emphasis omitted). Although Utah has not yet addressed the question, most jurisdictions to consider the apparent-manufacturer doctrine have adopted it.6

6 See, e.g., Carney v. Sears, Roebuck & Co., 309 F.2d 300, 304 (4th Cir. 1962) (citing Highland Pharmacy, Inc. v. White, 144 Va. 106, 131 S.E. 198 (Va. 1926)); Davis v. United States Gauge, 844 F. Supp. 1443, 1446 (D. Kan. 1994); Moody v. Sears, Roebuck & Co., 324 F. Supp. 844, 846 (S.D. Ga. 1971) superseded by statute as stated in Freeman v. United Cities Propane Gas, Inc., 807 F. Supp. 1533, 1539-40 (M.D. Ga. 1992); Sears, Roebuck & Co. v. Morris, 273 Ala. 218, 136 So. 2d 883, 885 (Ala. 1961); Cravens, Dargan & Co. v. Pacific Indem. Co., 29 Cal. App. 3d 594, 105 Cal. Rptr. 607, 611 (Ct. App. 1972); King v. Douglas Aircraft Co., 159 So.2d 108, 110 (Fla. Dist. Ct. App.1963); Dudley Sports Co. v. Schmitt, 151 Ind. App. 217, 279 N.E.2d 266, 273 (Ind. Ct. App. 1972); Tice v. Wilmington Chem. Corp., 259 Iowa 27, 141 N.W.2d 616, 628 (Iowa 1966); Penn v. Inferno Mfg. Corp., 199 So.2d 210, 215 (La. Ct. App. 1967); Coca Cola Bottling Co. v. Reeves, 486 So.2d 374, 378 (Miss. 1986) superseded by statute as stated in Turnage v. Ford Motor Co., 260 F. Supp. 2d 722, 727 (S.D. Ind. 2003)); Slavin v. Francis H. Leggett & Co., 114 N.J.L. 421, 177 A. 120, 121 (N.J. 1935) aff’d, 117 N.J.L. 101, 186 A. 832 (N.J. 1936)); Andujar v. Sears Roebuck & Co., 193 A.D.2d 415, 597 N.Y.S.2d 78, 78 (App. Div. 1993) (citing Commissioners of State Ins. Fund v. City Chem. Corp., 290 N.Y. 64, 48 N.E.2d 262, 265 (N.Y. 1943)); Warzynski v. Empire Comfort Sys., Inc., 102 N.C. App. 222, 401 S.E.2d 801, 803-04 (N.C. Ct. App. 1991); Forry v. Gulf Oil Corp., 428 Pa. 334, 237 A.2d 593, 599 (Pa. 1968); Sears, Roebuck & Co. v. Black, 708 S.W.2d 925, 928 (Tex. App. 1986); Wojciuk v. United States Rubber Co., 13 Wis. 2d 173, 108 N.W.2d 149, 152-53 (Wis. 1961).

[*P19] As McQuivey has not urged us to adopt the apparent manufacturer doctrine here, we reserve that question for another day. We note, however, that Fulmer distributed the Blade AF-C1 helmet under its own name; typically describes itself as the “manufacturer” of Fulmer helmets on equipment safety reports filed with the National Highway Traffic Safety Administration; and puts its name on tags inside its helmets, certifying that they meet the applicable safety standards.

[*P20] Even without resort to the apparent-manufacturer doctrine, we conclude that the district court erred in granting summary judgment for Fulmer as a passive retailer. See [**13] Sanns, 2004 UT App 203, ¶ 21, 94 P.3d 301. Although KYL principally conducted the manufacturing, design, and testing of the helmets, [HN6] the passive-retailer doctrine does not ask whose role in manufacturing a defective product was the greatest; rather it asks whether a party “participate[d] in the design, manufacture, engineering, testing, or assembly of” the product. Id. This follows from the passive-retailer doctrine’s rationale, which is to dismiss codefendants to whom the finder of fact will, should the matter go to trial, inevitably apportion no fault.7

7 McQuivey also argues that the court erred in granting summary judgment in Fulmer’s favor on two other grounds: first, that “the passive-retailer doctrine is inappropriate” here because “the alleged manufacturer was never a proper party to this case,” and second, that “even if the doctrine otherwise applied, only the strict-liability claims against Fulmer should be dismissed.” Because we determine that the court erred in ruling that Fulmer qualifies as a passive retailer, we do not address these arguments.

CONCLUSION

[*P21] We reverse the district court’s judgment of dismissal and remand the case for further proceedings.


“Sportsmen” bill working through congress would allow ATVs in Wilderness

ATVsComing to Your Favorite Wilderness Area

Thousand Island Lake (2997m) and Banner Peak (...

May 29, 2012

The misleadingly-named “Sportsmen’s Heritage Act” has wilderness-busting
provisions that could be coming to any and all of America’s wilderness
areas.

“It’s possibly the biggest threat to this nation’s wilderness areas since
the Wilderness Act was passed in 1964,” says Tom Martin, Co-Director of
River Runners for Wilderness, “even long time wilderness defenders who
thought they’d seen it all are shocked.”

HR4089 is a combination of 4 previous bills. Although there are many
debatable elements, the worst allows what were previously illegal activities
to now occur in all areas managed as wilderness under the National Park
Service, the Forest Service, and all of the nation’s Federal land agencies.

Among activities that could be allowed are ATV use, new road construction,
mining, logging and the construction of fixed structures. In fact, the most
dangerous element of this bill is that it gives managers a blank check to
allow any activities they construe as beneficial to sportsmen.

The bill has passed the House of Representatives and a Senate Companion Bill
S2066 has been introduced with supporters such as the National Rifle
Association and sports industry groups urging a quick passage.

The Congressional Research Service (CRS), a branch of the Library of
Congress that provides in depth analysis to members of Congress and others,
outlined the threats in a recent review of the proposal. The CRS noted that
the bill’s “..language could be construed as opening wilderness areas to
virtually any activity related to hunting and fishing, even if otherwise
inconsistent with wilderness values. Despite the Wilderness Act’s explicit
ban on temporary and permanent roads, if H.R. 4089 were passed, roads
arguably could be constructed in wilderness areas.”

The report also noted that “.while it appears that timber harvest could be
allowed, it would seem difficult to harvest timber without roads or
machines.”

The entire CRS’ brief (4 page) memo is on the River Runners for Wilderness
website at http://rrfw.org/sites/default/files/CRSreport.pdf

The wilderness destroying language in this bill could easily be omitted
before final passage and we urge you to take action to insist that this is
done:

Contact your state’s Senators and ask that they not support S2066 and to
protect all provisions of The Wilderness Act.

You are also encouraged to contact lobbying supporters of HR4089 & S2066,
such as the National Rifle Association at their website, particularly if you
are a member: https://www.nraila.org/secure/contact-us.aspx and let them
know that you support the Wilderness Act as written.

You are also encouraged to write a letter to the editor of your local
newspaper. National media has largely ignored these bills and you could be
instrumental in raising awareness of the threat.

To learn more about the threats posed by this legislation, visit:
Wilderness Watch’s analysis:
http://www.wildernesswatch.org/pdf/HR%204089%20Analysis–WW.pdf.
Other advocacy group sites:
http://wilderness.org/content/sneak-attack-wilderness and
http://conservationlands.org/time-to-stop-hr-4089-in-its-tracks.

Surveys show that wilderness enjoys very broad support by our country’s
citizens and should be protected. River Runners for Wilderness will keep you
apprised of this looming disaster for our country’s precious wilderness
lands.

__._,_.___

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